NAIOP Commends House Passage of Tax Provisions, May 21, 2008
Washington, D.C. – The National Association
of Industrial and Office Properties (NAIOP) commends the United
State House of Representatives for today passing H.R. 6049, the
Energy and Job Creation Act of 2008. The bill, which passed the
House by a vote of 263 to 160, extends expired and expiring tax
provisions vital to the commercial real estate industry. Included
among these provisions are 15-year qualified leasehold improvement
depreciation and brownfields remediation expensing, which expired
at the end of 2007, as well as the energy efficient commercial
building tax deduction, due to expire at the end of 2008.
“We are pleased that the House has taken action to extend tax policies important to the commercial real estate industry” said NAIOP President Thomas J. Bisacquino. “These crucial tax extenders, which have already expired or will expire soon, enjoy broad bipartisan support in the House and Senate. We commend House Ways and Means Committee Chairman Charles Rangel and Ranking Member Jim McCrery for working together to ensure that these were included in H.R. 6049. We hope that the Senate, upon returning from their Memorial Day recess, will take prompt action to pass tax extenders legislation.”
NAIOP has been working for much of the year with Senators, members of Congress and their committee staff to pass tax extenders legislation. Most recently, NAIOP and a broad coalition of 114 business, labor and education organizations voiced strong support for extension of essential tax extenders in letters to Speaker of the House Nancy Pelosi, House Minority Leader John Boehner, House Ways and Means Committee Chairman Charles Rangel and Ranking Member Jim McCrery. Letters were also sent to Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell, Senate Finance Committee Chairman Max Baucus and Ranking Member Charles Grassley, and all members of the Senate. Letters sent included language addressing NAIOP’s top issues, including:
• Leasehold improvement depreciation, also known as tenant improvement depreciation, is the ability to deduct the cost of the customized improvements a building owner makes to a rental space to configure it for a tenant’s needs. NAIOP supports extending the reduced rate of tenant improvement depreciation to 15 years down from 39 years, which more accurately reflects the economic reality of the improvements’ typical lifespan.
• Brownfields remediation expensing allows the costs incurred in cleaning up a brownfields site to be written off immediately, creating an important incentive to revitalize contaminated properties. Extending this deduction will allow developers to recoup expensive capital costs from environmental remediation to continue developing the project.
• The Energy Efficient Commercial Building Tax Deduction that was created by the Energy Policy Act of 2005 established a tax deduction for expenses related to the design and installation of energy-efficient commercial building systems. H.R. 6049 would extend tax deductions to 2009. While NAIOP applauds the extension of this incentive, we encourage Congress to increase the deduction amount from $1.80 per square foot to $2.25 as originally proposed.
“We are hopeful that the full Senate will take up the bipartisan tax extenders legislation sponsored by Finance Committee Chairman Senator Max Baucus and Ranking Member Senator Charles Grassley promptly upon their return from their Memorial Day recess so that a bill can be sent to the President in June or July,” Bisacquino said. “This will provide a measure of economic certainty for our members.”
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About NAIOP: The National Association of Industrial and Office Properties is the nation’s leading trade association for developers, owners, investors and other professionals in industrial, office and mixed-use commercial real estate. Founded in 1967, NAIOP comprises 16,500+ members in 55 chapters throughout the United States and Canada. NAIOP provides networking opportunities, educational programs, research on trends and innovations and strong legislative representation. For more information, visit www.naiop.org.
“We are pleased that the House has taken action to extend tax policies important to the commercial real estate industry” said NAIOP President Thomas J. Bisacquino. “These crucial tax extenders, which have already expired or will expire soon, enjoy broad bipartisan support in the House and Senate. We commend House Ways and Means Committee Chairman Charles Rangel and Ranking Member Jim McCrery for working together to ensure that these were included in H.R. 6049. We hope that the Senate, upon returning from their Memorial Day recess, will take prompt action to pass tax extenders legislation.”
NAIOP has been working for much of the year with Senators, members of Congress and their committee staff to pass tax extenders legislation. Most recently, NAIOP and a broad coalition of 114 business, labor and education organizations voiced strong support for extension of essential tax extenders in letters to Speaker of the House Nancy Pelosi, House Minority Leader John Boehner, House Ways and Means Committee Chairman Charles Rangel and Ranking Member Jim McCrery. Letters were also sent to Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell, Senate Finance Committee Chairman Max Baucus and Ranking Member Charles Grassley, and all members of the Senate. Letters sent included language addressing NAIOP’s top issues, including:
• Leasehold improvement depreciation, also known as tenant improvement depreciation, is the ability to deduct the cost of the customized improvements a building owner makes to a rental space to configure it for a tenant’s needs. NAIOP supports extending the reduced rate of tenant improvement depreciation to 15 years down from 39 years, which more accurately reflects the economic reality of the improvements’ typical lifespan.
• Brownfields remediation expensing allows the costs incurred in cleaning up a brownfields site to be written off immediately, creating an important incentive to revitalize contaminated properties. Extending this deduction will allow developers to recoup expensive capital costs from environmental remediation to continue developing the project.
• The Energy Efficient Commercial Building Tax Deduction that was created by the Energy Policy Act of 2005 established a tax deduction for expenses related to the design and installation of energy-efficient commercial building systems. H.R. 6049 would extend tax deductions to 2009. While NAIOP applauds the extension of this incentive, we encourage Congress to increase the deduction amount from $1.80 per square foot to $2.25 as originally proposed.
“We are hopeful that the full Senate will take up the bipartisan tax extenders legislation sponsored by Finance Committee Chairman Senator Max Baucus and Ranking Member Senator Charles Grassley promptly upon their return from their Memorial Day recess so that a bill can be sent to the President in June or July,” Bisacquino said. “This will provide a measure of economic certainty for our members.”
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About NAIOP: The National Association of Industrial and Office Properties is the nation’s leading trade association for developers, owners, investors and other professionals in industrial, office and mixed-use commercial real estate. Founded in 1967, NAIOP comprises 16,500+ members in 55 chapters throughout the United States and Canada. NAIOP provides networking opportunities, educational programs, research on trends and innovations and strong legislative representation. For more information, visit www.naiop.org.